No deal at EGA talks, no date for resumption either

An accord on freeing up trade in so-called environmental goods continues to elude negotiators from participating countries.

by Kanaga Raja

GENEVA: Participants negotiating a plurilateral Environmental Goods Agreement (EGA) at the WTO aimed at eliminating tariffs on a range of environmental goods failed to reach a deal on 4 December following a week of intensive negotiations.

Negotiators ended the meeting to meet again, but with no date set or mentioned.

And with a new US administration headed by president-elect Donald Trump, who had campaigned, among other things, on a promise to follow a different trade policy, the proposed EGA, like other trade talks (at the WTO or on a regional basis), faces an uncertain future.

The eighteenth round of the EGA negotiations ran from 28 November through 2 December, with trade ministers and senior officials arriving on 3 December for the ministerial segment to try and conclude a deal the following day. A ministerial press conference that was scheduled to take place at the WTO on 4 December was cancelled.

In a news item on its website, the WTO secretariat put a positive spin, stating: “Progress made on Environmental Goods Agreement, setting stage for further talks: Ministers and senior officials from the 18 participants in the Environmental Goods Agreement (representing 46 WTO members) met in Geneva this weekend to work towards liberalizing trade on a range of important environmental goods. Constructive talks were held and progress was made, but participants were not in a position to close the existing gaps at this point. The intensive discussions set the stage for further talks in the near future.”

The participants negotiating the EGA are Australia; Canada; China; Chinese Taipei; Costa Rica; the European Union (representing Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the United Kingdom); Hong Kong-China; Iceland; Israel; Japan; Korea; Liechtenstein; New Zealand; Norway; Singapore; Switzerland; Turkey; and the United States.

According to information posted on the WTO website, the products involved in the negotiations are used in a variety of environmentally related functions including: generating clean and renewable energy; improving energy and resource efficiency; reducing air, water and soil pollution; managing solid and hazardous waste; noise abatement; and monitoring environmental quality.

In a statement on the WTO website, WTO Director-General Roberto Azevedo urged participants “to show whatever flexibility they can to help conclude the deal.”

A joint statement issued by US Trade Representative Ambassador Michael Froman and European Union Trade Commissioner Cecilia Malmstrom, the co-chairs of the 3-4 December EGA ministerial meeting, said: “As co-chairs of this weekend’s EGA Ministerial, the United States and the European Union worked with all WTO members involved to achieve the broadest possible consensus through creative solutions to bridge the gaps in the negotiations.

“Many EGA participants engaged constructively and brought new contributions to the table. The Chairs issued documents designed to stabilize the text of the agreement and produced a revised products list that balances priorities and sensitivities. The participants will now return to capitals to consider next steps.”

The joint statement gave no tentative dates or time horizon for any further talks.

During a meeting back in late August at the WTO, a tentative agreement was reached among the participants to accelerate the negotiations on the EGA on the basis of the revised draft list of 304 tariff lines circulated by the overall chair of the negotiations, Andrew Martins of Australia.

According to media reports, going into this latest round of negotiations, there were differences between the EU and China over the issue of bicycles, which is of offensive interest to China while remaining of defensive interest to the EU.

Other outstanding product lines of concern among the various participants included wood pallets and high-tech batteries, media reports said.

One participant in the EGA negotiations told journalists following the conclusion of the ministerial segment that there has been no agreement on the list of products that would serve as the basis for the continuation of the work so far.

The consultations took place on two lists – the list put forward by the co-chairs of the talks (the US and the EU), which was not accepted by China; and another, shorter list put forward by China. Neither has been accepted by consensus as the basis for the continuation of the talks, said the participant.

According to trade officials, the Chinese list had some 231 products, while the co-chairs’ list was an expanded one.

An Associated Press news report quoted Turkey’s Economy Minister Nihat Zeybekci as saying: “In the last seconds, China proposed a list that was not studied enough. Many countries, they have concerns about the list.”

According to the news report, the minister also cited other concerns between Canada and New Zealand on one side and Japan and Chinese Taipei on the other over the issue of lumber.

Some countries’ priorities were other countries’ red lines, trade officials said in reference to the lists. Concerns were voiced, among others, over consumer products and wood, trade officials added.

Determination for a deal

Speaking to journalists after the ministerial  meeting  broke  up  on  4 December, EU Trade Commissioner  Malmstrom, referring to the revised list (by the co-chairs) that had been presented earlier in the day, said most countries thought they could live with this list, but “very late in the process” came the Chinese list which “had a different point of departure” and made a lot of changes.

“All delegations had some of their red lines moved in or moved out in a way that it was impossible to deal with in a couple of hours,” she said.

Malmstrom however said that everyone who came in was leaving with a clear determination to do this deal. “This is important for the environment, for the climate, for our moral obligation to show that trade can deliver after the Paris and Marrakesh agreements [on climate change].

“We can show that trade and environment can go hand in hand. They are not in opposition. We have a lot of things in common already. So we would just have to reflect upon this and come back and continue next year.”

She noted that many countries have offensive and defensive interests and the list that was on the table on 3 December and some of the additions that were made with the US co-chair were welcomed by many delegations as a further way forward.

“So we have to reflect now what we can do. Well, we couldn’t make a deal today but we have to continue.”

The Chinese list had commonalities with the original list but there were lots of differences too, Malmstrom said – “too many to be able to absorb them today.”

The next step is that “we all go home, we reflect [and] report to our capitals ...”

She also said that all delegations agreed that this is a very important agreement and “we are committed to conclude this and we will reinforce our efforts next year.”

Asked if there is a risk that the appetite for this type of agreement will diminish after US president-elect Trump takes office in January, she said: “There is a risk of course. But it is very difficult to determine. We don’t know very much about the incoming administration.”

Malmstrom pointed out that there is not even a nominee for the new US Trade Representative yet. “So it is very hard to judge. But we hope that the US will be on board of course.” (SUNS8370)        p